Sunday, April 17th was the designated moment. The world’s leading oil producers were expected to bring fresh discipline to the chaotic petroleum market and spark a return to high prices. Meeting in Doha, the glittering capital of petroleum-rich Qatar, the oil ministers of the Organization of the Petroleum Exporting Countries (OPEC), along with such key non-OPEC producers as Russia and Mexico, were scheduled to ratify a draft agreement obliging them to freeze their oil output at current levels. In anticipation of such a deal, oil prices had begun to creep inexorably upward, from $30 per barrel in mid-January to $43 on the eve of the gathering. But far from restoring the old oil order, the meeting ended in discord, driving prices down again and revealing deep cracks in the ranks of global energy producers.
It is hard to overstate the significance of the Doha debacle. At the very least, it will perpetuate the low oil prices that have plagued the industry for the past two years, forcing smaller firms into bankruptcy and erasing hundreds of billions of dollars of investments in new production capacity. It may also have obliterated any future prospects for cooperation between OPEC and non-OPEC producers in regulating the market. Most of all, however, it demonstrated that the petroleum-fueled world we’ve known these last decades — with oil demand always thrusting ahead of supply, ensuring steady profits for all major producers — is no more. Replacing it is an anemic, possibly even declining, demand for oil that is likely to force suppliers to fight one another for ever-diminishing market shares.
The Road to Doha
Before the Doha gathering, the leaders of the major producing countries expressed confidence that a production freeze would finally halt the devastating slump in oil prices that began in mid-2014. Most of them are heavily dependent on petroleum exports to finance their governments and keep restiveness among their populaces at bay. Both Russia and Venezuela, for instance, rely on energy exports for approximately 50% of government income, while for Nigeria it’s more like 75%. So the plunge in prices had already cut deep into government spending around the world, causing civil unrest and even in some cases political turmoil.
No one expected the April 17th meeting to result in an immediate, dramatic price upturn, but everyone hoped that it would lay the foundation for a steady rise in the coming months. The leaders of these countries were well aware of one thing: to achieve such progress, unity was crucial. Otherwise they were not likely to overcome the various factors that had caused the price collapsein the first place. Some of these were structural and embedded deep in the way the industry had been organized; some were the product of their own feckless responses to the crisis.
On the structural side, global demand for energy had, in recent years, ceased to rise quickly enough to soak up all the crude oil pouring onto the market, thanks in part to new supplies from Iraq and especially from the expanding shale fields of the United States. This oversupply triggered the initial 2014 price drop when Brent crude — the international benchmark blend — went from a high of $115 on June 19th to $77 on November 26th, the day before a fateful OPEC meeting in Vienna. The next day, OPEC members, led by Saudi Arabia, failed to agree on either production cuts or a freeze, and the price of oil went into freefall.
The failure of that November meeting has been widely attributed to the Saudis’ desire to kill off new output elsewhere — especially shale production in the United States — and to restore their historic dominance of the global oil market. Many analysts were also convinced that Riyadh was seeking to punish regional rivals Iran and Russia for their support of the Assad regime in Syria (which the Saudis seek to topple).
The rejection, in other words, was meant to fulfill two tasks at the same time: blunt or wipe out the challenge posed by North American shale producers and undermine two economically shaky energy powers that opposed Saudi goals in the Middle East by depriving them of much needed oil revenues. Because Saudi Arabia could produce oil so much more cheaply than other countries — for as little as $3 per barrel — and because it could draw upon hundreds of billions of dollars in sovereign wealth funds to meet any budget shortfalls of its own, its leaders believed it more capable of weathering any price downturn than its rivals. Today, however, that rosy prediction is looking grimmer as the Saudi royals begin to feel the pinch of low oil prices, and find themselves cutting back on the benefits they had been passing on to an ever-growing, potentially restive population while still financing a costly, inconclusive, and increasingly disastrous war in Yemen.
Many energy analysts became convinced that Doha would prove the decisive moment when Riyadh would finally be amenable to a production freeze. Just days before the conference, participants expressed growing confidence that such a plan would indeed be adopted. After all, preliminary negotiations between Russia, Venezuela, Qatar, and Saudi Arabia had produced a draft document that most participants assumed was essentially ready for signature. The only sticking point: the nature of Iran’s participation.
The Iranians were, in fact, agreeable to such a freeze, but only after they were allowed to raise their relatively modest daily output to levels achieved in 2012 before the West imposed sanctions in an effort to force Tehran to agree to dismantle its nuclear enrichment program. Now that those sanctions were, in fact, being lifted as a result of the recently concluded nuclear deal, Tehran was determined to restore the status quo ante. On this, the Saudis balked, having no wish to see their arch-rival obtain added oil revenues. Still, most observers assumed that, in the end, Riyadh would agree to a formula allowing Iran some increase before a freeze. “There are positive indications an agreement will be reached during this meeting… an initial agreement on freezing production,” said Nawal Al-Fuzaia, Kuwait’s OPEC representative, echoing the views of other Doha participants.
But then something happened. According to people familiar with the sequence of events, Saudi Arabia’s Deputy Crown Prince and key oil strategist, Mohammed bin Salman, called the Saudi delegation in Doha at 3:00 a.m. on April 17th and instructed them to spurn a deal that provided leeway of any sort for Iran. When the Iranians — who chose not to attend the meeting — signaled that they had no intention of freezing their output to satisfy their rivals, the Saudis rejected the draft agreement it had helped negotiate and the assembly ended in disarray.
Geopolitics to the Fore
Most analysts have since suggested that the Saudi royals simply considered punishing Iran more important than raising oil prices. No matter the cost to them, in other words, they could not bring themselves to help Iran pursue its geopolitical objectives, including giving yet more support to Shiite forces in Iraq, Syria, Yemen, and Lebanon. Already feeling pressured by Tehran and ever less confident of Washington’s support, they were ready to use any means available to weaken the Iranians, whatever the danger to themselves.
“The failure to reach an agreement in Doha is a reminder that Saudi Arabia is in no mood to do Iran any favors right now and that their ongoing geopolitical conflict cannot be discounted as an element of the current Saudi oil policy,” said Jason Bordoff of the Center on Global Energy Policy at Columbia University.
Many analysts also pointed to the rising influence of Deputy Crown Prince Mohammed bin Salman, entrusted with near-total control of the economy and the military by his aging father, King Salman. As Minister of Defense, the prince has spearheaded the Saudi drive to counter the Iranians in a regional struggle for dominance. Most significantly, he is the main force behind Saudi Arabia’s ongoing intervention in Yemen, aimed at defeating the Houthi rebels, a largely Shia group with loose ties to Iran, and restoring deposed former president Abd Rabbuh Mansur Hadi. After a year of relentless U.S.-backed airstrikes (including the use of cluster bombs), the Saudi intervention has, in fact, failed to achieve its intended objectives, though it has produced thousands of civilian casualties, provoking fierce condemnation from U.N. officials, and created space for the rise of al-Qaeda in the Arabian Peninsula. Nevertheless, the prince seems determined to keep the conflict going and to counter Iranian influence across the region.
For Prince Mohammed, the oil market has evidently become just another arena for this ongoing struggle. “Under his guidance,” the Financial Timesnoted in April, “Saudi Arabia’s oil policy appears to be less driven by the price of crude than global politics, particularly Riyadh’s bitter rivalry with post-sanctions Tehran.” This seems to have been the backstory for Riyadh’s last-minute decision to scuttle the talks in Doha. On April 16th, for instance, Prince Mohammed couldn’t have been blunter to Bloomberg, even if he didn’t mention the Iranians by name: “If all major producers don’t freeze production, we will not freeze production.”
With the proposed agreement in tatters, Saudi Arabia is now expected to boost its own output, ensuring that prices will remain bargain-basement low and so deprive Iran of any windfall from its expected increase in exports. The kingdom, Prince Mohammed told Bloomberg, was prepared to immediately raise production from its current 10.2 million barrels per day to 11.5 million barrels and could add another million barrels “if we wanted to” in the next six to nine months. With Iranian and Iraqi oil heading for market in larger quantities, that’s the definition of oversupply. It would certainly ensure Saudi Arabia’s continued dominance of the market, but it might also wound the kingdom in a major way, if not fatally.
A New Global Reality
No doubt geopolitics played a significant role in the Saudi decision, but that’s hardly the whole story. Overshadowing discussions about a possible production freeze was a new fact of life for the oil industry: the past would be no predictor of the future when it came to global oil demand. Whatever the Saudis think of the Iranians or vice versa, their industry is being fundamentally transformed, altering relationships among the major producers and eroding their inclination to cooperate.
Until very recently, it was assumed that the demand for oil would continue to expand indefinitely, creating space for multiple producers to enter the market, and for ones already in it to increase their output. Even when supply outran demand and drove prices down, as has periodically occurred, producers could always take solace in the knowledge that, as in the past, demand would eventually rebound, jacking prices up again. Under such circumstances and at such a moment, it was just good sense for individual producers to cooperate in lowering output, knowing that everyone would benefit sooner or later from the inevitable price increase.
But what happens if confidence in the eventual resurgence of demand begins to wither? Then the incentives to cooperate begin to evaporate, too, and it’s every producer for itself in a mad scramble to protect market share. This new reality — a world in which “peak oil demand,” rather than “peak oil,” will shape the consciousness of major players — is what the Doha catastrophe foreshadowed.
At the beginning of this century, many energy analysts were convinced that we were at the edge of the arrival of “peak oil”; a peak, that is, in the output of petroleum in which planetary reserves would be exhausted long before the demand for oil disappeared, triggering a global economic crisis. As a result of advances in drilling technology, however, the supply of oil has continued to grow, while demand has unexpectedly begun to stall. This can be traced both to slowing economic growth globally and to an accelerating “green revolution” in which the planet will be transitioning to non-carbon fuel sources. With most nations now committed to measures aimed at reducing emissions of greenhouse gases under the just-signed Paris climate accord, the demand for oil is likely to experience significant declines in the years ahead. In other words, global oil demand will peak long before supplies begin to run low, creating a monumental challenge for the oil-producing countries.
This is no theoretical construct. It’s reality itself. Net consumption of oil in the advanced industrialized nations has already dropped from 50 million barrels per day in 2005 to 45 million barrels in 2014. Further declines are in store as strict fuel efficiency standards for the production of new vehicles and other climate-related measures take effect, the price of solar and wind power continues to fall, and other alternative energy sources come on line. While the demand for oil does continue to rise in the developing world, even there it’s not climbing at rates previously taken for granted. With such countries also beginning to impose tougher constraints on carbon emissions, global consumption is expected to reach a peak and begin an inexorable decline.According to experts Thijs Van de Graaf and Aviel Verbruggen, overall world peak demand could be reached as early as 2020.
In such a world, high-cost oil producers will be driven out of the market and the advantage — such as it is — will lie with the lowest-cost ones. Countries that depend on petroleum exports for a large share of their revenues will come under increasing pressure to move away from excessive reliance on oil. This may have been another consideration in the Saudi decision at Doha. In the months leading up to the April meeting, senior Saudi officials dropped hints that they were beginning to plan for a post-petroleum era and that Deputy Crown Prince bin Salman would play a key role in overseeing the transition.
On April 1st, the prince himself indicated that steps were underway to begin this process. As part of the effort, he announced, he was planning an initial public offering of shares in state-owned Saudi Aramco, the world’s number one oil producer, and would transfer the proceeds, an estimated $2 trillion, to its Public Investment Fund (PIF). “IPOing Aramco and transferring its shares to PIF will technically make investments the source of Saudi government revenue, not oil,” the prince pointed out. “What is left now is to diversify investments. So within 20 years, we will be an economy or state that doesn’t depend mainly on oil.”
For a country that more than any other has rested its claim to wealth and power on the production and sale of petroleum, this is a revolutionary statement. If Saudi Arabia says it is ready to begin a move away from reliance on petroleum, we are indeed entering a new world in which, among other things, the titans of oil production will no longer hold sway over our lives as they have in the past.
This, in fact, appears to be the outlook adopted by Prince Mohammed in the wake of the Doha debacle. In announcing the kingdom’s new economic blueprint on April 25th, he vowed to liberate the country from its “addiction” to oil.” This will not, of course, be easy to achieve, given the kingdom’s heavy reliance on oil revenues and lack of plausible alternatives. The 30-year-old prince could also face opposition from within the royal family to his audacious moves (as well as his blundering ones in Yemen and possibly elsewhere). Whatever the fate of the Saudi royals, however, if predictions of a future peak in world oil demand prove accurate, the debacle in Doha will be seen as marking the beginning of the end of the old oil order.
Michael T. Klare, a TomDispatch regular, is a professor of peace and world security studies at Hampshire College and the author, most recently, of The Race for What’s Left. A documentary movie version of his book Blood and Oil is available from the Media Education Foundation. Follow him on Twitter at @mklare1.
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Copyright 2016 Michael T. Klare
In January 2011, I presented a futures research project to the Progressive Caucus in Congress, then the largest of all the caucuses in that body. The report, Progressives 2040 — which was sponsored by ProgressiveCongress.org and published by Demos — analyzed a large set of major trends that would shape the future of the progressive movement for the next three decades, and offered a set of scenarios that illustrated how these trends might work together to create a range of possible futures that the movement will need to be prepared for.
This is the first post in “What We Know About The Progressive Future” — a series that I imagine will be a long (probably 10-12 post) look at that research five years on, updating my conclusions and taking a fresh look at the big drivers and high leverage points that will determine the future of our movement.
For most pundits, the most striking thing about the Iowa Caucus was the virtual tie between the two Democratic candidates (which portends a longer and perhaps more exciting election season and higher ratings for those in the media to look forward to), and the surprising 1-2-and-3 order of Cruz, Trump, and Rubio. I’m writing this less than 24 hours after the caucuses ended, and more than enough on both these topics has already been written by others (for God’s sake, people, it’s just Iowa), so I’m going to spare you another analysis ex cathedra from my belly button as to What It All Means For November.
I’m far more interested in another trend that emerged last night — a small detail that will almost certainly have a much longer historical tail than anything else that might happen between now and Election Day. This trend was crystallized by the stunning fact that Bernie Sanders got 85% of the votes of caucus-goers under 30.
That’s not a typo. Eighty-five percent.
That’s a number that strategists from every end of the political spectrum need to be paying attention to, because it is heralding the arrival of the Millennial Generation as a political force to be reckoned with.
My report saw this coming. Back in January 2011, I wrote this about them:
The Millennial generation (born 1980-2000) is the largest and most ethnically diverse generation in American history, with 44% identifying as members of a racial minority. They are the most globally connected generation to date: they travel more, speak more languages, and have friends all over the world. They are more progressive in their core values and attitudes that any cohort we’ve seen in at least a century. And they are rising fast: by 2020, they will be outvoting their elders, dominating elections and bringing their own priorities to the table. We can expect the Millennials to launch their first serious presidential candidate in 2020, and elect their first president probably no later than 2024.
Perhaps the most important fact about the Millennials is the sheer size of this generation. They’re the first cohort we’ve seen in the past 40 years that’s actually big enough to swamp their Boomer parents, whose interests and worldviews have dominated American politics ever since the youngest of them hit voting age in the late 1970s. The Boom was the biggest generation in American history, to the point where their sheer size itself was transformative (as they say: quantity has a quality all its own). But the Millennials are even bigger. And between now and 2020, the youngest edge of this generation will finally turn 18 and register to vote. The results stand to be at least as transformative for us as a nation as the moment when the Boomers themselves arrived.
Conservative Millennials? Don’t hold your breath
Any number of GOP pundits have written thumb-sucking articles explaining how this cohort is going to become more conservative as it ages (because every generation does, right?) Feel free to rip those up: it’s not likely to happen, for several reasons — starting with the fact that no, not every generation does. The Boomers did, because from left to right and youth through their approaching old age, they’ve shared a belief in radical individualism — the primacy of the individual over any claims made by society — that fed everything from Evangelicalism and free market fundamentalism on the right to New Age religions and social experimentation on the left. That individualism is the one shining through-line that defines everything that generation has ever embraced. It made them hippies. And it also made them vote for Reagan.
The Millennials are their historical opposite number — a generation raised from babyhood to cooperate, share, include, network, and self-organize. They value conformity (Boomers and Xers are horrified by the “calling out” ritual that Millennials run on each other constantly as they vigilantly police each other’s behavior. We’d have choked on our own spit before telling each other what to say, think or do; and would have rightly expected to be told to fuck off if we tried it), and as this pervades their politics in the coming decades, it’s going to involve a lot of telling other people how they should live. That’s how their GI grandparents created and enforced the great American Consensus of the ’40s, ’50s, and ’60s, and it’s how they’re going to re-create a new consensus about the Next America they’re going to build.
That bred-in-the-bone collectivism is likely to be as durable a lifelong feature as Boomer individualism has been; but it stands in stark opposition to conservatism as it’s currently constituted. It’s possible to imagine another, distinctively Millennial form of conservatism emerging in time — but it would have to be rooted in the idea of a strong social contract, one that obligates individuals to cede some of their desires to the greater good, represented by trusted authorities — and is willing to use social shame as an enforcement mechanism. The GOP is a long way from offering any narratives along these lines now. If they do emerge, it could take another 20 years or more, becoming something today’s Millennials embrace as they age on through their 40s, 50s and 60s.
Other conservatives hold out hope that that all-time-high number of Millennials from immigrant families will benefit them in time, since the usual pattern has been for second-generation immigrants (the first generation born here) to do very well educationally and economically, and to vote more conservatively than either their parents or their third-gen kids. That might be a very plausible scenario — except for the nasty fact that Millennials have already grown up scarred and terrorized by a GOP that has never been able to lay off immigrant-bashing. Again, it’s going to take a radical change within that party — plus another 15 years of over-the-top effort — to win even the grudging trust of a generation that’s already marinated in decades of conservative anti-immigrant hysteria before that’s even remotely likely.
In any event: anybody waiting for the Great Millennial Conservative Revival probably shouldn’t hold their breath. If it comes at all, it’s going to be a very long while indeed. In the meantime, these young adults have a revolution to pull off. And that moment is coming — much sooner than anybody seems ready to think.
Millennials and Elections
Obama, to his credit, was the first candidate to recognize the raw political power and profound unrest of this rising cohort in 2008. Even though fully half of the Millennial generation was still too young to vote, his overt efforts to capture the energy and attention of the half that could was a conscious strategy. The Millennials ended up supplying him with the margin that put him over the top in the election — support he later rewarded by bringing home the troops (most of whom were Millennials) and restructuring the federal student loan program to make over $30 billion more in Pell Grants available and reduce the loan burden on new graduates (both of which were policies I pointed to in my original 2011 report).
But the Millennials want more. They’re looking into a future that most of them understand is a fatal dead end without a radical, rip-up-the-floorboards restructuring of how the entire planet works — how we do everything from energy and money to community and education to transportation and agriculture. This yearning for a different kind of world even has the potential to upend our current understandings of “right” and “left,” as I wrote in my report:
Some research suggests that this generation’s politics lean toward the “independent” and the “centrist.” However, those words don’t mean the same thing to under-30 Americans that they do to older ones. The self-described “independents” also express core values that are deeply collectivist and inclusive, which gives them a strong affinity for progressive ideas and solutions. (Studies by Pew and Barna have even found these same affinities among self-identified conservatives in this cohort.) Likewise, these “centrists” see their generation’s communal focus on a shared future and shared prosperity as a matter of plain common sense. To them, “we’re in this together” is not a radical idea; indeed, it stands at the center of their politics.
The Millennials spurned Hillary in 2008 because they were craving a true change candidate — and Obama promised to be that. But in the end, the change he could deliver wasn’t enough. And that’s why this generation is going, overwhelmingly, for Bernie Sanders, whom they see as sitting entirely outside the corrupt party system that made it impossible for Obama to give them the goods, unbeholden to Wall Street, uncontaminated by party cronyism, unfiltered in the media — someone who seems to be entirely their own. This is what their candidates look like — and are going to continue to look like for the next several election cycles.
Given that the youngest 15% or so of the Millennial cohort is still too young to vote, it’s not clear that the Millennials will get their revolution this year. My prediction above that they’d dominate our elections by 2020 was based on the fact that that’s when the very tail end of the cohort — the ones born in 2000 — will all have reached adulthood, putting them finally at their full political strength. Whether or not they show up for 2016 is also complicated by a few other factors, including:
- How disillusioned the older ones are following their experience with Obama, whom many of them feel very disappointed by — a real problem that surfaced in 2012, when many of them didn’t return to the polls.
- The general tendency of young adults in their 20s to not vote. Voting is a behavior that becomes more reliable with age. By 2020, the oldest Millennials will be 40, and half will be over 30 — which means they should start showing up far more regularly.
- Persistent efforts on the part of the GOP to disenfranchise students, which have large effects in some parts of the country.
- How well Sanders survives the onslaught of conservative attacks that we all know are coming.
It’s safe to say that the Millennials will be a vastly bigger factor in 2016 than they were in either 2008 or 2012 — and that Sanders’ success to date can and should be interpreted as this generation’s announcement of its growing political presence with far louder and more insistent authority than we’ve ever heard from them before.
However, in this election cycle, it’s not at all clear that it will be enough to get them what they want. We are tantalizingly close to a generational tipping point, but have not completely arrived at it just quite yet. But by the next cycle, that point will almost certainly be well behind us — and from then on, for the next 40 years, our politics will be pretty much entirely dominated, owned, and determined by the Millennials’ collectivist worldviews, interests, desires, and priorities. They will, this time or next, succeed in voting themselves the transformation they seek. It’s not a question of if, but when.
What we’re seeing when we look at the Bernie Sanders phenomenon is a direct window into our own political future. When will it emerge? Maybe not today, and maybe not this November — but it’s coming soon, and it or something like it will be the dominant political reality for the rest of our lives.
Photo: Ian Buck via Flickr
Sara Robinson is a Seattle-based futurist and veteran blogger on culture, politics, and religion. Since 2006, her work (gathered in the Archive section of her blog) regularly appeared at Orcinus, Our Future, Group News Blog, and Alternet. She’s also written for Salon, Huffington Post, Grist, the New Republic, New York Magazine, Firedoglake, and many other sites.
Robinson holds an MS in Futures Studies from the University of Houston, and a BA in Journalism from the USC Annenberg School of Communication. She was a Schumann Fellow, and also held senior fellowships at the Campaign for America’s Future and the Commonweal Foundation. She currently serves on the national board of NARAL Pro-Choice America.
Near Misses, Radioactive Leaks, and Flooding
In both Chernobyl and Fukushima, areas around the devastated plants were made uninhabitable for the foreseeable future. In neither place, before disaster began to unfold, was anyone expecting it and few imagined that such a catastrophe was possible. In the United States, too, despite the knowledge since 1945 that nuclear power, at war or in peacetime, holds dangers of a stunning sort, the general attitude remains: it can’t happen here — nowhere more dangerously in recent years than on the banks of New York’s Hudson River, an area that could face a nuclear peril endangering a population ofnearly 20 million.
As the Fukushima tragedy struck, President Obama assured Americans that U.S. nuclear plants were closely monitored and built to withstand earthquakes. That statement covered one of the oldest plants in the country, the Indian Point Energy Center (IPEC) in Westchester, New York, first opened in 1962. One of 61 commercial nuclear plants in the country, it has two reactors that generate electricity for homes across New York City and Westchester County. It is located in the sixth most densely populated urban area in the world, the New York metropolitan region, just 30 miles north of Manhattan Island and the planet’s most economically powerful city.
The plant sits astride two seismic faults, which has prompted those opposing its continued operation to call for a detailed analysis of its capacity to resist an earthquake. In addition, a long series of accidents and ongoing hazards has only increased the potential for catastrophe. According to a report by the National Resources Defense Council (NDRC), if a nuclear disaster of a Fukushima magnitude were to strike Indian Point, it would necessitate the evacuation of at least 5.6 million people. In 2003, the existing evacuation plan for the area was deemed inadequate in a report by James Lee Witt, former head of the Federal Emergency Management Agency.
American officials have urged U.S. citizens to stay 50 miles away from the Fukushima plant. Such a 50-mile circle around IPEC would stretch past Kingston in Ulster County to the north, past Bayonne and Jersey City to the south, almost to New Haven, Connecticut, to the east, and into Pennsylvania to the west. It would include all of New York City except for Staten Island and all of Fairfield, Connecticut. “Many scholars have already argued that any evacuation plans shouldn’t be called plans, but rather ‘fantasy documents,’” Daniel Aldrich, a professor of political science at Purdue University, told the New York Times.
Paul Blanch, a nuclear engineer who worked in the industry for 40 years as well as with the Nuclear Regulatory Commission (NRC), thinks a worst-case accident at Indian Point could make the region, including parts of Connecticut, uninhabitable for generations.
According to a report from the Indian Point Safe Energy Coalition, there were 23 reported problems at the plant from its inception to 2005, including steam generator tube ruptures, reactor containment flooding, transformer fires, the failure of backup power for emergency sirens, and leaks of radioactive water laced with tritium. In the latest tritium leak, reported only last month, an outflow of the radioactive isotope from the plant has infused both local groundwater and the Hudson River. (Other U.S. nuclear plants have had their share of tritium leaks as well, including Turkey Point nuclear plant in Florida where such a leak is at the moment threatening drinking water wells.)
Experts agree that although present levels of tritium in groundwater near the plant are “alarming,” the tritium in the river will not be considered harmful until it reaches a far greater concentration of 120,000 picocuries per liter of water. (A picocurie is a standard unit of measurement for radioactivity.) Tritium is the lightest radioactive substance to leak from Indian Point, but according to an assessment by the New York Department of State, other potentially more dangerous radioactive elements like strontium-90, cesium-137, cobalt-60, and nickel-63 are also escaping the plant and entering both the groundwater and the river.
Representatives of Entergy Corporation, which owns the Indian Point plant, report that they don’t know when the present leak began or what its source might be. “No one has made a statement as to when the leak started,” wrote Paul Blanch in an email to us. “It could have started two years ago.” Nor does anyone seem to know where the leak is, how much radioactive matter is leaking, or how it can be stopped. The longer the leak persists, the greater the likelihood of isotopes more potent than tritium contaminating local drinking water.
According to David Lochbaum, director of the Nuclear Safety Project for the Union of Concerned Scientists (UCS) and once a trainer for NRC inspectors, the danger of flooding at the reactor should be an even greater focus of concern than radioactive substance outflows, since it could result in a reactor core meltdown. Yet despite repeated calls for Indian Point’s shutdown from the early 1970s on, it keeps operating.
On April 2, 2000, the NRC rated one of Indian Point’s two reactors the most troubled in the country, and it has been closed for lengthy periods because of system failures of various sorts. This, it turns out, is typical of Entergy-owned reactors. There were 10 “near-miss” incidents at U.S. nuclear reactors last year, a majority of them at three Entergy plants, according to a UCS report on nuclear plant safety. A near-miss incident is an event or condition that could increase the chance of reactor core damage by a factor of 10 or more. In response, the Nuclear Regulatory Commission must send an inspection team to investigate.
The number of such incidents has declined since UCS initiated its annual review in 2010, “overall, a positive trend,” according to report author Lochbaum. “Five years ago, there were nearly twice as many near misses. That said, the nuclear industry is only as good as its worst plant owner. The NRC needs to find out why Entergy plants are experiencing so many potentially serious problems.” Upstate New York’s Ginna plant, he adds, has been operating as long as Indian Point, but with only two “events” in its history. At Indian Point “there’s a major event every two to three years.”
What troubles Lochbaum more than anything else is Indian Point’s vulnerability to flooding. “There was a problem in May 2015 where a transformer exploded,” he told us. “There was an automatic fire sprinkler system installed to put this out. But it ended up flooding the building adjacent to where the explosion had taken place. Fortunately a worker noticed that an inch or two of water had accumulated. If the room had flooded up to five inches, all the power in the plant would have been lost. It would have plunged unit 3 into a ‘station blackout.’”
This might indeed have led to some kind of Fukushima-on-the-Hudson situation. In Fukushima, after the earthquake wiped out the normal power supply and tsunami floodwaters took away the backup supply, workers were unable to get cooling water into the reactor cores and three of the plant’s six reactors melted down.
In 2007, when Indian Point’s plant owner applied to the NRC for a 20-year extension of the plant’s operating license, it was found that a flood alarm could be installed in the room in question for about $200,000. As Lochbaum explains, “The owner determined it was cost-beneficial, that if they installed this flood alarm… it [would reduce] the risk of core meltdown by 20%, and [reduce] the amount of radiation that people on the plant could be exposed to by about 40%, at a cost of about two cents per person for the 20 million people living within 50 miles of the plant.” But nine years later, he told us, that flood alarm has still not been installed.
Potential Pipeline Explosions
As if none of this were enough, a new set of dangers to Indian Point have arisen in recent years due to a high-pressure natural gas pipeline currently being built by Spectra Energy. Dubbed the Algonquin Incremental Market (AIM) pipeline, it is to carry fracked natural gas from the Marcellus Shale formation underlying New York and adjacent states to the Canadian border. At 42 inches in diameter, this pipeline is the biggest that can at present be built — and here’s the catch: AIM is slated to pass within 150 feet of the plant’s reactors.
A former Spectra worker hired to help oversee safety during the pipeline’s construction told a reporter that the company had taken dangerous shortcuts in its rush to begin the project. He had witnessed, he said, “at least two dozen” serious safety violations and transgressions.
Taking shortcuts in pipeline construction could, in the end, prove a risky business. Pipeline ruptures are the commonest cause of gas explosions like the one that, in March 2014 in Manhattan’s East Harlem, killed eight, injured 70, and leveled two apartment buildings. Robert Miller, chairman of the National Association of Pipeline Safety Representatives, attributed the rising rates of such incidents in newly constructed pipelines to “poor construction practices or maybe not enough quality control, quality assurance programs out there to catch these problems before those pipelines go into service.”
In January 2015, the National Transportation Safety Board published a study documenting that gas accidents in “high-consequence” areas (where there are a lot of people and buildings) have been on the rise. With the New York metropolitan area so close to Indian Point, it seems odd indeed to independent experts that the nuclear plant with the sorriest safety history in the country has been judged safe enough for a high-pressure gas pipeline to be run right by it.
A hazards assessment replete with errors was the basis for the go-ahead. Richard B. Kuprewicz, a pipeline infrastructure expert and incident investigator with more than 40 years of energy industry experience, has called that risk assessment “seriously deficient and inadequate.”
At another nuclear plant subsequently shut down, as David Lochbaum points out, a rigorous risk analysis was conducted for possible explosions based on a worst-case scenario. (“I couldn’t think of any scenario that would be worse than what they presumed.”) At Indian Point, the risk analysis was, however, done on a best-case basis. Among other things, it assumed that any pipeline leak around the plant could be stopped in less than three minutes — an unlikelihood at best. “It’s night and day. They did a very conservative analysis for [the other plant] and a very cavalier best-case scenario for Indian Point… I don’t know why they opted for [this] drive-by analysis.”
Of all the contaminants released in this industrial world, radioactivity may, in a sense, be the least visible and least imaginable, even if the most potentially devastating, were something to go wrong. As a result, the dangers of the “peaceful” atom have often proved hard to absorb before disaster strikes — as at the Three Mile Island reactor near Middletown, Pennsylvania, on March 28, 1979. Even when such a power plant sits near a highway or a community, it’s usually a reality to which people pay scant attention, in part because nuclear science is alien territory. This is why safety at nuclear power plants has been something citizens have relied on the government for.
The history of Indian Point, however, offers a grim reminder that the government agencies expected to protect citizens from disaster aren’t doing a particularly good job of it. Over the past several years, for instance, residents in the path of the AIM pipeline project have begun accusing the Federal Energy Regulatory Commission (FERC) of overwhelming bias in the industry’s favor. As FERC has a corner on oversight and approval of all pipeline construction, this is alarming. Its stamp of approval on a pipeline can only be contested via appeals that lead directly back to FERC itself, as the Natural Gas Act of 1938 gave the agency sole discretion over pipeline construction in the U.S. Ever since then, its officials have approved pipelines of every sort almost without exception. Worse yet, at Indian Point, the Nuclear Regulatory Commission joined FERC in green-lighting AIM.
During the two-and-a-half-year period in which the pipeline was approved and construction began, the mainstream media virtually ignored the project and its potential dangers. Only this February, when New York Governor Andrew Cuomo, who has been opposed to the relicensing of Indian Point, first raised concerns about the dangers of the pipeline, did the New York Times, the paper of record for the New York metropolitan area, finally publish a piece on AIM. So it fell to a grassroots movement of local activists to bring AIM’s dangers to public attention. Its growing resistance to a pipeline that could precipitate just about anything up to a Fukushima-on-the-Hudson-style event evidently led Governor Cuomo to urge FERC to postpone construction until a safety review could be completed, a request that the agency rejected. In February, alarmed by reports of tritium leaking from the plant, the governor also directed the state’s departments of environmental conservation and health to investigate the likely duration and consequences of such a leak and its potential impacts on public health.
According to Paul Blanch, the risk of a pipeline explosion in proximity to Indian Point is one in 1,000, odds he believes are too high given what’s potentially at stake. (He considers a one-in-a-million chance acceptable.) “I’ve had over 45 years of nuclear experience and [experience in] safety issues. I have never seen [a situation] that essentially puts 20 million residents at risk, plus the entire economics of the United States by making a large area surrounding Indian Point uninhabitable for generations. I’m not an alarmist and haven’t been known as an alarmist, but the possibility of a gas line interacting with a plant could easily cause a Fukushima type of release.”
According to Blanch, attempts to regulate nuclear plants after a Fukushima- or Chernobyl-type catastrophe are known in the trade as “tombstone regulation.” Nobody, of course, should ever want to experience such a situation on the Hudson, or have America’s own mini-Hiroshima seven decades late, or find literal tombstones cropping up in the New York metropolitan area due to a nuclear disaster. One hope for preventing all of this and ensuring protection for New York’s citizenry: the continuing growth of impressive citizen pressure and increasing public alarm around both the pipeline and Indian Point. It gives new meaning to the phrase “power to the people.”
TomDispatch regular Ellen Cantarow reported on Israel and the West Bank from 1979 to 2009 for the Village Voice, Mother Jones, Inquiry, and Grand Street, among other publications. For the past five years she has been writing about the environmental ravages of the oil and gas industries.
Alison Rose Levy is a New York-based journalist who covers the nexus of health, science, the environment, and public policy. She has reported on fracking, pipelines, the Trans-Pacific Partnership, chemical pollution, and the health impacts of industrial activity for the Huffington Post, Alternet,Truthdig, and EcoWatch.
Copyright 2016 Ellen Cantarow and Alison Rose Levy
By Thomas Frank, author of the just-published Listen, Liberal, or What Ever Happened to the Party of the People? (Metropolitan Books) from which this essay is adapted. He has also written Pity the Billionaire, The Wrecking Crew, and What’s the Matter With Kansas? among other works. He is the founding editor of The Baffler. Reprinted with permission from Tomdispatch.com
When you press Democrats on their uninspiring deeds — their lousy free trade deals, for example, or their flaccid response to Wall Street misbehavior — when you press them on any of these things, they automatically reply that this is the best anyone could have done. After all, they had to deal with those awful Republicans, and those awful Republicans wouldn’t let the really good stuff get through. They filibustered in the Senate. They gerrymandered the congressional districts. And besides, change takes a long time. Surely you don’t think the tepid-to-lukewarm things Bill Clinton and Barack Obama have done in Washington really represent the fiery Democratic soul.
So let’s go to a place that does. Let’s choose a locale where Democratic rule is virtually unopposed, a place where Republican obstruction and sabotage can’t taint the experiment.
Let’s go to Boston, Massachusetts, the spiritual homeland of the professional class and a place where the ideology of modern liberalism has been permitted to grow and flourish without challenge or restraint. As the seat of American higher learning, it seems unsurprising that Boston should anchor one of the most Democratic of states, a place where elected Republicans (like the new governor) are highly unusual. This is the city that virtually invented the blue-state economic model, in which prosperity arises from higher education and the knowledge-based industries that surround it.
The coming of post-industrial society has treated this most ancient of American cities extremely well. Massachusetts routinely occupies the number one spot on the State New Economy Index, a measure of how “knowledge-based, globalized, entrepreneurial, IT-driven, and innovation-based” a place happens to be. Boston ranks high on many of Richard Florida’s statistical indices of approbation — in 2003, it was number one on the “creative class index,” number three in innovation and in high tech — and his many books marvel at the city’s concentration of venture capital, its allure to young people, or the time it enticed some firm away from some unenlightened locale in the hinterlands.
Boston’s knowledge economy is the best, and it is the oldest. Boston’s metro area encompasses some 85 private colleges and universities, the greatest concentration of higher-ed institutions in the country — probably in the world. The region has all the ancillary advantages to show for this: a highly educated population, an unusually large number of patents, and more Nobel laureates than any other city in the country.
The city’s Route 128 corridor was the original model for a suburban tech district, lined ever since it was built with defense contractors and computer manufacturers. The suburbs situated along this golden thoroughfare are among the wealthiest municipalities in the nation, populated by engineers, lawyers, and aerospace workers. Their public schools are excellent, their downtowns are cute, and back in the seventies their socially enlightened residents were the prototype for the figure of the “suburban liberal.”
Another prototype: the Massachusetts Institute of Technology, situated in Cambridge, is where our modern conception of the university as an incubator for business enterprises began. According to a report on MIT’s achievements in this category, the school’s alumni have started nearly 26,000 companies over the years, including Intel, Hewlett Packard, and Qualcomm. If you were to take those 26,000 companies as a separate nation, the report tells us, its economy would be one of the most productive in the world.
Then there are Boston’s many biotech and pharmaceutical concerns, grouped together in what is known as the “life sciences super cluster,” which, properly understood, is part of an “ecosystem” in which PhDs can “partner” with venture capitalists and in which big pharmaceutical firms can acquire small ones. While other industries shrivel, the Boston super cluster grows, with the life-sciences professionals of the world lighting out for the Athens of America and the massive new “innovation centers” shoehorning themselves one after the other into the crowded academic suburb of Cambridge.
To think about it slightly more critically, Boston is the headquarters for two industries that are steadily bankrupting middle America: big learning and big medicine, both of them imposing costs that everyone else is basically required to pay and which increase at a far more rapid pace than wages or inflation. A thousand dollars a pill, 30 grand a semester: the debts that are gradually choking the life out of people where you live are what has madethis city so very rich.
Perhaps it makes sense, then, that another category in which Massachusetts ranks highly is inequality. Once the visitor leaves the brainy bustle of Boston, he discovers that this state is filled with wreckage — with former manufacturing towns in which workers watch their way of life draining away, and with cities that are little more than warehouses for people on Medicare. According to one survey, Massachusetts has the eighth-worst rate of income inequality among the states; by another metric it ranks fourth. However you choose to measure the diverging fortunes of the country’s top 10% and the rest, Massachusetts always seems to finish among the nation’s most unequal places.
Seething City on a Cliff
You can see what I mean when you visit Fall River, an old mill town 50 miles south of Boston. Median household income in that city is $33,000, among the lowest in the state; unemployment is among the highest, 15% in March 2014, nearly five years after the recession ended. Twenty-three percent of Fall River’s inhabitants live in poverty. The city lost its many fabric-making concerns decades ago and with them it lost its reason for being. People have been deserting the place for decades.
Many of the empty factories in which their ancestors worked are still standing, however. Solid nineteenth-century structures of granite or brick, these huge boxes dominate the city visually — there always seems to be one or two of them in the vista, contrasting painfully with whatever colorful plastic fast-food joint has been slapped up next door.
Most of the old factories are boarded up, unmistakable emblems of hopelessness right up to the roof. But the ones that have been successfully repurposed are in some ways even worse, filled as they often are with enterprises offering cheap suits or help with drug addiction. A clinic in the hulk of one abandoned mill has a sign on the window reading simply “Cancer & Blood.”
The effect of all this is to remind you with every prospect that this is a place and a way of life from which the politicians have withdrawn their blessing. Like so many other American scenes, this one is the product of decades of deindustrialization, engineered by Republicans and rationalized by Democrats. This is a place where affluence never returns — not because affluence for Fall River is impossible or unimaginable, but because our country’s leaders have blandly accepted a social order that constantly bids down the wages of people like these while bidding up the rewards for innovators, creatives, and professionals.
Even the city’s one real hope for new employment opportunities — an Amazon warehouse that is now in the planning stages — will serve to lock in this relationship. If all goes according to plan, and if Amazon sticks to the practices it has pioneered elsewhere, people from Fall River will one day get to do exhausting work with few benefits while being electronically monitored for efficiency, in order to save the affluent customers of nearby Boston a few pennies when they buy books or electronics.
But that is all in the future. These days, the local newspaper publishes an endless stream of stories about drug arrests, shootings, drunk-driving crashes, the stupidity of local politicians, and the lamentable surplus of “affordable housing.” The town is up to its eyeballs in wrathful bitterness against public workers. As in: Why do they deserve a decent life when the rest of us have no chance at all? It’s every man for himself here in a “competition for crumbs,” as a Fall River friend puts it.
The Great Entrepreneurial Awakening
If Fall River is pocked with empty mills, the streets of Boston are dotted with facilities intended to make innovation and entrepreneurship easy and convenient. I was surprised to discover, during the time I spent exploring the city’s political landscape, that Boston boasts a full-blown Innovation District, a disused industrial neighborhood that has actually been zoned creative — a projection of the post-industrial blue-state ideal onto the urban grid itself. The heart of the neighborhood is a building called “District Hall” — “Boston’s New Home for Innovation” — which appeared to me to be a glorified multipurpose room, enclosed in a sharply angular façade, and sharing a roof with a restaurant that offers “inventive cuisine for innovative people.” The Wi-Fi was free, the screens on the walls displayed famous quotations about creativity, and the walls themselves were covered with a high-gloss finish meant to be written on with dry-erase markers; but otherwise it was not much different from an ordinary public library. Aside from not having anything to read, that is.
This was my introduction to the innovation infrastructure of the city, much of it built up by entrepreneurs shrewdly angling to grab a piece of the entrepreneur craze. There are “co-working” spaces, shared offices for startups that can’t afford the real thing. There are startup “incubators” and startup “accelerators,” which aim to ease the innovator’s eternal struggle with an uncaring public: the Startup Institute, for example, and the famous MassChallenge, the “World’s Largest Startup Accelerator,” which runs an annual competition for new companies and hands out prizes at the end.
And then there are the innovation Democrats, led by former Governor Deval Patrick, who presided over the Massachusetts government from 2007 to 2015. He is typical of liberal-class leaders; you might even say he is their most successful exemplar. Everyone seems to like him, even his opponents. He is a witty and affable public speaker as well as a man of competence, a highly educated technocrat who is comfortable in corporate surroundings. Thanks to his upbringing in a Chicago housing project, he also understands the plight of the poor, and (perhaps best of all) he is an honest politician in a state accustomed to wide-open corruption. Patrick was also the first black governor of Massachusetts and, in some ways, an ideal Democrat for the era of Barack Obama — who, as it happens, is one of his closest political allies.
As governor, Patrick became a kind of missionary for the innovation cult. “The Massachusetts economy is an innovation economy,” he liked to declare, and he made similar comments countless times, slightly varying the order of the optimistic keywords: “Innovation is a centerpiece of the Massachusetts economy,” et cetera. The governor opened “innovation schools,” a species of ramped-up charter school. He signed the “Social Innovation Compact,” which had something to do with meeting “the private sector’s need for skilled entry-level professional talent.” In a 2009 speech called “The Innovation Economy,” Patrick elaborated the political theory of innovation in greater detail, telling an audience of corporate types in Silicon Valley about Massachusetts’s “high concentration of brainpower” and “world-class” universities, and how “we in government are actively partnering with the private sector and the universities, to strengthen our innovation industries.”
What did all of this inno-talk mean? Much of the time, it was pure applesauce — standard-issue platitudes to be rolled out every time some pharmaceutical company opened an office building somewhere in the state.
On some occasions, Patrick’s favorite buzzword came with a gigantic price tag, like the billion dollars in subsidies and tax breaks that the governor authorized in 2008 to encourage pharmaceutical and biotech companies to do business in Massachusetts. On still other occasions, favoring inno has meant bulldozing the people in its path — for instance, the taxi drivers whose livelihoods are being usurped by ridesharing apps like Uber. When these workers staged a variety of protests in the Boston area, Patrick intervened decisively on the side of the distant software company. Apparently convenience for the people who ride in taxis was more important than good pay for people who drive those taxis. It probably didn’t hurt that Uber had hired a former Patrick aide as a lobbyist, but the real point was, of course, innovation: Uber was the future, the taxi drivers were the past, and the path for Massachusetts was obvious.
A short while later, Patrick became something of an innovator himself. After his time as governor came to an end last year, he won a job as a managing director of Bain Capital, the private equity firm that was founded by his predecessor Mitt Romney — and that had been so powerfully denounced by Democrats during the 2012 election. Patrick spoke about the job like it was just another startup: “It was a happy and timely coincidence I was interested in building a business that Bain was also interested in building,” he told theWall Street Journal. Romney reportedly phoned him with congratulations.
At a 2014 celebration of Governor Patrick’s innovation leadership, Google’s Eric Schmidt announced that “if you want to solve the economic problems of the U.S., create more entrepreneurs.” That sort of sums up the ideology in this corporate commonwealth: Entrepreneurs first. But how has such a doctrine become holy writ in a party dedicated to the welfare of the common man? And how has all this come to pass in the liberal state of Massachusetts?
The answer is that I’ve got the wrong liberalism. The kind of liberalism that has dominated Massachusetts for the last few decades isn’t the stuff of Franklin Roosevelt or the United Auto Workers; it’s the Route 128/suburban-professionals variety. (Senator Elizabeth Warren is the great exception to this rule.) Professional-class liberals aren’t really alarmed by oversized rewards for society’s winners. On the contrary, this seems natural to them — because they are society’s winners. The liberalism of professionals just does not extend to matters of inequality; this is the area where soft hearts abruptly turn hard.
Innovation liberalism is “a liberalism of the rich,” to use the straightforward phrase of local labor leader Harris Gruman. This doctrine has no patience with the idea that everyone should share in society’s wealth. What Massachusetts liberals pine for, by and large, is a more perfect meritocracy — a system where the essential thing is to ensure that the truly talented get into the right schools and then get to rise through the ranks of society. Unfortunately, however, as the blue-state model makes painfully clear, there is no solidarity in a meritocracy. The ideology of educational achievement conveniently negates any esteem we might feel for the poorly graduated.
This is a curious phenomenon, is it not? A blue state where the Democrats maintain transparent connections to high finance and big pharma; where they have deliberately chosen distant software barons over working-class members of their own society; and where their chief economic proposals have to do with promoting “innovation,” a grand and promising idea that remains suspiciously vague. Nor can these innovation Democrats claim that their hands were forced by Republicans. They came up with this program all on their own.
Thomas Frank is the author of the just-published Listen, Liberal, or What Ever Happened to the Party of the People? (Metropolitan Books) from which this essay is adapted. He has also written Pity the Billionaire, The Wrecking Crew, and What’s the Matter With Kansas? among other works. He is the founding editor of The Baffler.
Copyright 2016 Thomas Frank
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Introductory Comments by Tom Engelhardt (Reprinted from Tomdispatch.com)
They say that imperial wars come home in all sorts of ways. Think of the Michigan that TomDispatch regular Laura Gottesdiener describes today as one curious example of that dictum. If you remember, in the spring of 2003, George W. Bush ordered the invasion of Iraq and the overthrow of that country’s autocratic ruler, Saddam Hussein. The invasion was launched with a “shock-and-awe” air show that was meant to both literally and figuratively “decapitate” the country’s leadership, from Saddam on down. At that time, there was another more anodyne term for the process that was also much in use, even if it has now faded from our vocabularies: “regime change.” And you remember how that all worked out, don’t you? A lot of Iraqi civilians — but no Iraqi leaders — were killed in shock-and-awe fashion that first night of the invasion and, as most Americans recall now that we’re in Iraq War 3.0, it didn’t get much better when the Bush administration’s proconsul in Baghdad, L. Paul Bremer III, disbanded the Iraqi military and Saddam’s Baathist Party (a brilliant formula for launching an instant insurgency), appointed his own chosen rulers in Baghdad, and gave the Americans every sort of special privilege imaginable by curiously autocratic decree in the name of spreading democracy in the Middle East.
It now seems that a version of regime change, Iraqi-style, has come home to roost in parts of Michigan — but with a curious twist. Think of Michigan’s governor, Rick Snyder, as the L. Paul Bremer of that state. He’s essentially given himself regime-change-style powers, impermeable to a statewide recall vote, and begun dismissing — or, if you will, decapitating — the local governments of cities and school districts, appointing managers in their place. In other words, his homegrown version of regime change involves getting rid of local democracy and putting individual autocrats in power instead. What, you might ask yourself, could possibly go wrong, especially since the governor himself is going national to limn the glories of his version of austerity and autocratic politics?
As it happens, TomDispatch dispatched our ace reporter, Laura Gottesdiener, who has been traveling the underside of American life for this site, to check out what regime change in Michigan really looks like. As with all her reports, this time with photographer Eduardo García, she offers a grim but startling vision of where this country may be headed. Tom
Something is rotten in the state of Michigan.
One city neglected to inform its residents that its water supply was laced with cancerous chemicals. Another dissolved its public school district and replaced it with a charter school system, only to witness the for-profit management company it hired flee the scene after determining it couldn’t turn a profit. Numerous cities and school districts in the state are now run by single, state-appointed technocrats, as permitted under an emergency financial manager law pushed through by Rick Snyder, Michigan’s austerity-promoting governor. This legislation not only strips residents of their local voting rights, but gives Snyder’s appointee the power to do just about anything, including dissolving the city itself — all (no matter how disastrous) in the name of “fiscal responsibility.”
If you’re thinking, “Who cares?” since what happens in Michigan stays in Michigan, think again. The state’s aggressive balance-the-books style of governance has already spread beyond its borders. In January, New Jersey Governor Chris Christie appointed bankruptcy lawyer and former Detroit emergency manager Kevyn Orr to be a “legal adviser” to Atlantic City. The Detroit Free Press described the move as “a state takeover similar to Gov. Rick Snyder’s state intervention in the Motor City.”
And this spring, amid the hullabaloo of Republicans entering the 2016 presidential race, Governor Snyder launched his own national tour to sell “the Michigan story to the rest of the country.” His trip was funded by a nonprofit (fed, naturally, by undisclosed donations) named “Making Government Accountable: The Michigan Story.”
To many Michiganders, this sounded as ridiculous as Jeb Bush launching a super PAC dubbed “Making Iraq Free: The Bush Family Story.” Except Snyder wasn’t planning to enter the presidential rat race. Instead, he was attempting to mainstream Michigan’s form of austerity politics and its signature emergency management legislation, which stripped more than halfof the state’s African American residents of their local voting rights in 2013 and 2014.
As the governor jaunted around the country, Ann Arbor-based photographer Eduardo García and I decided to set out on what we thought of as our own two-week Magical Michigan Tour. And while we weren’t driving a specially outfitted psychedelic tour bus — we spent most of the trip in my grandmother’s 2005 Prius — our journey was nevertheless remarkably surreal. From the southwest banks of Lake Michigan to the eastern tips of the peninsula, we crisscrossed the state visiting more than half a dozen cities to see if there was another side to the governor’s story and whether Michigan really was, as one Detroit resident put it, “a massive experiment in unraveling U.S. democracy.”
Stop One: Water Wars in Flint
Just as we arrive, the march spills off the sidewalk in front of the city council building.
“Stop poisoning our children!” chants a little girl as the crowd tumbles down South Saginaw Street, the city’s main drag. We’re in Flint, Michigan, a place that hit the headlines last year for its brown, chemical-laced, possibly toxic water. A wispy white-haired woman waves a gallon jug filled with pee-colored liquid from her home tap. “They don’t care that they’re killing us!” she cries.
A Flint resident at the march demanding clean water. Photo credit: Eduardo García
We catch up with Claire McClinton, the formidable if grandmotherly organizer of the Flint Democracy Defense League, as we approach the roiling Flint River. It’s been a longtime dumping ground for the riverfront factories of General Motors and, as of one year ago today, the only source of the city’s drinking water. On April 25, 2014, on the instruction of the city’s emergency manager, Flint stopped buying its supplies from the Detroit Water and Sewerage Department and started drawing water directly from the river, which meant a budgetary savings of $12 million a year. The downside: people started getting sick.
Since then, tests have detected E. coli and fecal bacteria in the water, as well as high levels of trihalomethanes, a carcinogenic chemical cocktail known as THMs. For months, the city concealed the presence of THMs, which over years can lead to increased rates of cancer, kidney failure, and birth defects. Still, it was obvious to local residents that something was up. Some of them were breaking out in mysterious rashes or experiencing bouts of severe diarrhea, while others watched as their eyelashes and hair began to fall out.
As we cross a small footbridge, McClinton recounts how the city council recently voted to “do all things necessary” to get Detroit’s water back. The emergency manager, however, immediately overrode their decision, terming it “incomprehensible.”
“This is a whole different model of control,” she comments drily and explains that she’s now working with other residents to file an injunction compelling the city to return to the use of Detroit’s water. One problem, though: it has to be filed in Ingham County, home to Lansing, the state capital, rather than in Flint’s Genesee County, because the decision of a state-appointed emergency manager is being challenged. “Under state rule, that’s where you go to redress grievances,” she says. “Just another undermining of our local authority.”
In the meantime, many city residents remain frustrated and confused. A few weeks before the march, the city sent out two notices on the same day, packaged in the same envelope. One, printed in black-and-white, stated bluntly: “Our water system recently violated a drinking water standard.” The second, in flashy color, had this cheery message: “We are pleased to report that City of Flint water is safe and meets U.S. Environmental Protection Agency guidelines… You can be confident that the water provided to you today meets all safety standards.” As one recipient of the notices commented, “I can only surmise that the point was to confuse us all.”
McClinton marches in silence for a few minutes as the crowd doubles back across the bridge and begins the ascent up Saginaw Street. Suddenly, a man jumps onto a life-size statue of a runner at the Riverfront Plaza and begins to cloak him in one of the group’s T-shirts.
“Honey, I don’t want you getting in any trouble!” his wife calls out to him.
He’s struggling to pull a sleeve over one of the cast-iron arms when the droning weeoo-weeooo-weeoo of a police siren blares, causing a brief frenzy until the man’s son realizes he’s mistakenly hit the siren feature on the megaphone he’s carrying.
After a few more tense moments, the crowd surges forward, leaving behind the statue, legs stretched in mid-stride, arms raised triumphantly, and on his chest a new cotton T-shirt with the slogan: “Water You Fighting For?”
Stop Two: The Tri-Cities of Cancer
The next afternoon, we barrel down Interstate 75 into an industrial hellscape of smoke stacks, flare offs, and 18-wheelers, en route to another toxicity and accountability crisis. This one was caused by a massive tar sands refinery and dozens of other industrial polluters in southwest Detroit and neighboring River Rouge and Ecorse, cities which lie along the banks of the Detroit River.
Already with a slight headache from a haze of emissions, we meet photographer and community leader Emma Lockridge and her neighbor Anthony Parker in front of their homes, which sit right in the backyard of that tar sands refinery.
In 2006, the toxicity levels in their neighborhood, known simply by its zip code as “48217,” were 45 times higher than the state average. And that was before Detroit gave $175 million in tax breaks to the billion-dollar Marathon Petroleum Corporation to help it expand its refinery complex to process a surge of high-sulfur tar sands from Alberta, Canada.
The Marathon tar sands refinery in southwest Detroit. Photo credit: Eduardo García
“We’re a donor zip,” explains Lockridge as she settles into the driver’s seat of our car. “We have all the industry and a tax base, but we get nothing back.”
We set off on a whirlwind tour of their neighborhood, where schools have been torn down and parks closed due to the toxicity of the soil, while so many residents have died of cancer that it’s hard for their neighbors to keep track. “We used to play on the swings here,” says Lockridge, pointing to a rusted yellow swing set in a fenced-off lot where the soil has tested for high levels of lead, arsenic, and other poisonous chemicals. “Jumping right into the lead.”
As in other regions of Michigan, people have been fleeing 48217 in droves. Here, however, the depopulation results not from deindustrialization, but from toxicity, thanks to an ever-expanding set of factories. These include a wastewater treatment complex, salt mines, asphalt factories, cement plants, a lime and stone foundry, and a handful of steel mills all clustered in the tri-cities region.
As Lockridge and Parker explain, they have demanded that Marathon buy their homes. They have also implored the state to cap emission levels and have filed lawsuits against particularly toxic factories. In response, all they’ve seen are more factories given more breaks, while the residents of 48217 get none. Last spring, for example, the Michigan Department of Environmental Quality permitted the AK Steel plant, located close to the neighborhood, toincrease its toxic emissions as much as 725 times. The approval, according to the Detroit Free Press, came after “Gov. Rick Snyder’s business-promoting agency worked for months behind the scenes” lobbying the Department of Environmental Quality.
“Look at this cute little tree out of nowhere over here!” Lockridge exclaims, slowing the car in front of a scrawny plant whose branches, in the midst of this industrial wasteland, bend under the weight of white blossoms.
“That tree ain’t gonna grow up,” Parker responds. “It’s dead already.”
“It’s trying,” Lockridge insists. “Aww, it’s kind of sad. It’s a Charlie Brown tree.”
The absurdity of life in such an environment is highlighted when we reach a half-mile stretch of sidewalk sandwiched between a massive steel mill and a coal-fired power plant that has been designated a “Wellness Walk.”
“Energize your Life!” implores the sign affixed to a chain-link fence surrounding the power plant. It’s an unlikely site for an exercise walk, given that the state’s health officials considerthis strip and the nearby park “the epicenter of the state’s asthma burden.”
After a sad laugh, we head for Zug Island, a Homeland Security-patrolled area populated by what look to be giant black vacuum cleaners but are actually blast furnaces. The island was named for millionaire Samuel Zug, who built a lavish mansion there only to discover that it was sinking into swampland. It is now home to U.S. Steel, the largest steel manufacturer in the nation.
On our way back, we make a final stop at Oakwood Heights, an almost entirely vacant and partially razed subdivision located on the other side of the Marathon plant. “This is the white area that was bought out,” says Lockridge. The scene is eerie: small residential streets lined by grassy fields and the occasional empty house. That Marathon paid residents to evacuate their homes in this predominantly white section of town, while refusing to do the same in the predominantly African American 48217, which sits closer to the refinery, strikes neither Lockridge and Parker nor their neighbors as a coincidence.
We survey the remnants of the former neighborhood: bundles of ragged newspapers someone was once supposed to deliver, a stuffed teddy bear abandoned on a wooden porch, and a childless triangle-shaped playground whose construction, a sign reads, was “made possible by generous donations from Marathon.”
As this particularly unmagical stop on our Michigan tour comes to an end, Parker says quietly, “I’ve got to get my family out of here.”
Lockridge agrees. “I just wish we had a refuge place we could go to while we’re fighting,” she says. “You see we’re surrounded.”
Stop Three: The Great White North
Not all of Michigan’s problems are caused by emergency management, but this sweeping new power does lie at the heart of many local controversies. Later that night we meet with retired Detroit city worker, journalist, and organizer Russ Bellant who has made himself something of an expert on the subject.
In 2011, he explains, Governor Snyder signed an emergency manager law known as Public Act 4. The impact of this law and its predecessor, Public Act 72, was dramatic. In the city of Pontiac, for instance, the number of public employees plummeted from 600 to 50. In Detroit, the emergency manager of the school district waged a six-year slash-and-burn campaign that, in the end, shuttered 95 schools. In Benton Harbor, the manager effectively dissolved the city government, declaring: “The fact of the matter is, the city manager is now gone. I am the city manager. I replace the financial director, so I’m the financial director and the city manager. I am the mayor and the commission. And I don’t need them.”
So in 2012, Bellant cancelled all his commitments in Detroit, packed his car full of chocolate pudding snacks, canned juices, and fliers and headed north to support a statewide campaign to repeal the law through a ballot referendum in that fall’s general election. For two months, he crisscrossed the upper reaches of Michigan’s Lower Peninsula, the part of the state that people say looks like a hand, as well as the remote Upper Peninsula that borders Wisconsin and Canada.
“Seven or eight hours a day, I would just knock on doors,” he says.
In November, the efforts paid off and voters repealed the act, but the celebration was short-lived. Less than two months later, during a lame-duck session of the state legislature, Governor Snyder pushed through and signed Public Act 436, a broader version of the legislation that was referendum-proof. Since then, financial managers have continued to shut down fire departments, outsource police departments, sell off parking meters and public parks. In Flint, the manager even auctioned off the plastic Santa Claus that once adorned city hall, setting the initial bidding price at $5.
And here’s one fact of life in Michigan: emergency management is normally only imposed on majority-black cities. From 2013 to 2014, 52% of the African American residents in the state lived under emergency management, compared to only 2% of white residents. And yet the repeal vote against the previous version of the act was a demographic landslide: 75 out of 83 counties voted to nix the legislation, including all of Michigan’s northern, overwhelmingly white, rural counties. “I think people just internalized that P.A. 4 was undemocratic,” Bellant says.
That next morning, we travel north to the city of Alpena, a 97% whitelakeside town where Bellant knocked on doors and the recall was triumphant. The farther north we head, the more the landscape changes. We pass signs imploring residents to “Take Back America: Liberty Yes, Tyranny No.” Gas stations feature clay figurines of hillbillies drinking moonshine in bathtubs.
It’s almost evening when we arrive. We spend part of our visit at the Dry Dock, a dive bar overseen by a raspy-voiced bartender where all the political and demographic divides of the state — and, in many ways, the country — are on full display. Two masons are arguing about their union; the younger one likes the protections it provides, while his colleague ditched the local because he didn’t want to pay the dues. That move became possible only after Snyder signed controversial “right-to-work” legislation in 2012, allowing workers to opt-out of union dues and causing a sharp decline in union membership ever since.
Above their heads, the television screen projects intentionally terrifying images of the uprising in Baltimore in response to the police murder of Freddie Gray, an unarmed African American man. “The Bloods, the Crips, and the Guerrillas are out for the National Guard,” comments a carpenter about the unarmed protesters, a sneer of distain in his voice. “Not that I like the fucking cops, either,” he adds.
The bartender of the Dry Dock plays pool with other regulars. Photo credit: Eduardo García
Throughout our visit, people repeatedly told us that Alpena “isn’t Detroit or Flint” and that they have absolutely no fear of the state seizing control of their sleepy, white, touristy city. When we press the question with the owner of a bicycle shop, the hostility rises in his voice as he explains: “Things just run the way they should here” — by which he means, of course, that down in Detroit and Flint, residents don’t run things the way they should.
Yet, misconceptions notwithstanding, the county voted to repeal Public Act 4 with a staggering 63% of those who turned out opting to strike down the law.
Reflecting Bellant’s feeling that locals grasped the law’s undemocratic nature in some basic way, even if it would never affect them personally, one resident offered this explanation: “When you think about living in a democracy, then this is like financial martial law… I know they say these cities need help, but it didn’t feel like something that would help.”
Stop Four: The Fugitive Task Force
The next day, as 2,000 soldiers from the 175th Infantry Regiment of the National Guard fanned out across Baltimore, we head for Detroit’s west side where, only 24 hours earlier, a law enforcement officer shot and killed a 20-year-old man in his living room.
A crowd has already gathered near his house in the early summer heat, exchanging condolences, waving signs, and jostling for position as news crews set up cameras and microphones for a press conference to come. Versions of what happened quickly spread: Terrance Kellom was fatally shot when officers swarmed his house to deliver an arrest warrant. The authorities claim that he grabbed a hammer, prompting the shooting; his father, Kevin,contends Terrance was unarmed and kneeling in front of him when he was shot several times, including once in the back.
Kellom is just one of the 489 people killed in 2015 in the United States by law enforcement officers. There is, however, a disturbing twist to Kellom’s case. He was not, in fact, killed by the police but by a federal agent working with a little known multi-jurisdictional interagency task force coordinated by the U.S. Marshals.
Similar task forces are deployed across the country and they all share the same sordid history: the Marshals have been hunting people ever since the 1850 Fugitive Slave Act compelled the agency to capture slaves fleeing north for freedom. One nineteenth-century newspaper account, celebrating the use of bloodhounds in such hunts, wrote: “The Cuban dog would frequently pull down his game and tear the runaway to pieces before the officers could come up.”
These days, Detroit’s task force has grown particularly active as budget cuts have decimated the local police department. Made up of federal Immigration and Customs officers, police from half a dozen local departments, and even employees of the Social Security Administration office, the Detroit Fugitive Apprehension Team has nabbed more than 15,000 people. Arrest rates have soared since 2012, the same year the local police budget was chopped by 20%. Even beyond the task force, the number of federal agents patrolling the city has risen as well. The Border Patrol, for example, has increased its presence in the region by tenfold over the last decade and just two weeks ago announced the launch of a new $14 million Detroit station.
Kevin Kellom approaches the barricade of microphones and begins speaking so quietly that the gathered newscasters crush into each other in an effort to catch what’s he’s saying. “They assassinated my son,” he whispers. “I want justice and I’m going to get justice.”
Yet today, six weeks after Terrance’s death, no charges have been brought against the Immigration and Customs Enforcement agent who fired the fatal shot. Other law enforcement officers who have killed Michigan residents in recent years have similarly escaped punishment. Detroit police officer Joseph Weekley was videotaped killing seven-year-old Aiyana Jones with a submachine gun during a SWAT team raid on her home in 2010. He remains a member of the department. Ann Arbor police officer David Reid is alsoback on duty after fatally shooting 40-year-old artist and mother Aura Rosser in November 2014. The Ann Arbor police department ruled that a “justifiable homicide” because Rosser was holding a small kitchen knife during the encounter — a ruling that Rosser’s family members and city residents are contesting with an ongoing campaign calling for an independent investigation into her death.
Residents march during a #BlackLivesMatter protest on May 1, 2015, in Ann Arbor to call for an independent investigation into Aura Rosser’s death. Photo credit: Eduardo García
And such deadly incidents continue. Since Kellom’s death, law enforcement officers have fatally shot at least three more Michigan residents — one outside the city of Kalamazoo, another near Lansing, and a third in Battle Creek.
Stop Five: The Unprofitable All-Charter School District
Our final stop is Muskegon Heights, a small city on the banks of Lake Michigan, home to perhaps the most spectacular educational debacle in recent history. Here’s the SparkNotes version. In 2012, members of the Muskegon Heights public school board were given two options: dissolve the district entirely or succumb to an emergency manager’s rule. On arrival, the manager announced that he was dissolving the public school district and forming a new system to be run by the New York-based for-profit charter school management company Mosaica Education. Two years later, that company broke its five-year contract and fled because, according to the emergency manager, “the profit just simply wasn’t there.”
And here’s a grim footnote to this saga: in 2012, in preparation for the new charter school district, cryptically named the Muskegon Heights Public School Academy System, the emergency manager laid off every single school employee.
“We knew it was coming,” explained one of the city’s longtime elementary school teachers. She asked not to be identified, so I’ll call her Susan. “We received letters in the mail.”
Then, around one a.m. the night before the new charter school district was slated to open, she received a voicemail asking if she could teach the following morning. She agreed, arriving at Martin Luther King Elementary School for what would be the worst year in her more than two-decade career.
When we visit that school, a single-story brick building on the east side of town, the glass of the front door had been smashed and the halls were empty, save for two people removing air conditioning units. But in the fall of 2012, when Susan was summoned, Martin Luther King was still filled with students — and chaos. Schedules were in disarray. Student computers were broken. There were supply shortages of just about everything, even rolls of toilet paper. The district’s already barebones special education program had beenfurther gutted. The “new,” non-unionized teaching staff — about 10% of whom initially did not have valid teaching certificates — were overwhelmingly young, inexperienced, and white. (Approximately 75% of the town’s residents are African American.)
“Everything was about money, I felt, and everyone else felt it, too,” Susan says.
The smashed glass of the front entrance of Martin Luther King Jr. Elementary School, which closed after students fled the charter school district. Photo credit: Eduardo García
With her salary slashed to less than $30,000, she picked up a second job at a nearby after-school program. Her health faltered. Instructed by the new administration never to sit down during class, a back condition worsened until surgery was required. The stress began to affect her short-term memory. Finally, in the spring, Susan sought medical leave and never came back.
She was part of a mass exodus. Advocates say that more than half the teachers were either fired, quit, or took medical leave before the 2012-2013 school year ended. Mosaica itself wasn’t far behind, breaking its contract at the end of the 2014 school year. The emergency manager said he understood the company’s financial assessment, comparing the school system to “abroke-down car.” That spring, Governor Snyder visited and called the district“a work in progress.”
Across the state, the education trend has been toward privatization andincreased control over local districts by the governor’s office, with results that are, to say the least, underwhelming. This spring, a report from The Education Trust, an independent national education nonprofit, warned that the state’s system had gone “from bad to worse.”
“We’re now on track to perform lower than the nation’s lowest-performing states,” the report’s author, Amber Arellano, told the local news.
Later that afternoon, we visited the city’s James Jackson Museum of African American History, where we sat with Dr. James Jackson, a family physician and longtime advocate of community-controlled public education in the city.
He explains that the city’s now-failing struggle for local control and quality education is part of a significantly longer history. Most of the town’s families originally arrived here in the first half of the twentieth century from the Jim Crow South, where public schools for Black students were not only abysmally underfunded, but also thwarted by censorship and outside governance, as historian Carter Goodwin Woodson explained in his groundbreaking 1933 study, The Mis-Education of the Negro. Well into the twentieth century, for example, the Declaration of Independence and the U.S. Constitution were barred from grade-school textbooks for being too aspirational. “When you control a man’s thinking you do not have to worry about his actions,” Woodson wrote back then.
More than eight decades later, Dr. Jackson offered similar thoughts about the Muskegon Heights takeover as he led us through the museum, his bright yellow T-shirt reminding us to “Honor Black History Every Day 24/7 — 365.”
“We have to control our own education,” Jackson said, as we passed sepia newspaper clippings of civil rights marches and an 1825 bill of sale for Peggy and her son Jonathan, purchased for $371 by James Aiken of Warren County, Georgia. “Until we control our own school system, we can’t be properly educated.”
As we leave, we stop a moment to take in an electronic sign hanging in the museum’s window that, between announcements about upcoming book club meetings and the establishment’s hours, flashed this refrain in red letters:
The education of
Belongs to the People
Not the governor
The following day, we finally arrived back in Detroit, our notebooks and iPhone audio records and camera memory cards filled to the brim, heads spinning from everything we had seen, our aging Prius-turned-tour-bus in serious need of an oil change.
While we had been bumping along on our Magical Michigan Tour, the national landscape had, in some ways, grown even more surreal. Bernie Sanders, the independent socialist senator from Vermont, announced that he was challenging Hillary Clinton for the Democratic ticket. Detroit neuroscientist Dr. Ben Carson — famous for declaring that Obamacare was “the worst thing that has happened in this nation since slavery” — entered the Republican circus. And amid the turmoil, Governor Snyder’s style continued to attract attention, including from the editors of Bloomberg View, who toutedhis experience with “urban revitalization,” concluding: “His brand of politics deserves a wider audience.”
So buckle your seat belts and watch out. In some “revitalized” Bloombergian future, you, too, could flee your school district like the students and teachers of Muskegon Heights, or drink contaminated water under the mandate of a state-appointed manager like the residents of Flint, or be guaranteed toxic fumes to breathe like the neighbors of 48217, or get shot like Terrance Kellom by federal agents in your own living room. All you have to do is let Rick Snyder’s yellow submarine cruise into your neighborhood.
Laura Gottesdiener is a freelance journalist and the author of A Dream Foreclosed: Black America and the Fight for a Place to Call Home. Her writing has appeared in Mother Jones, Al Jazeera, Guernica, Playboy,Rolling Stone, and frequently at TomDispatch.
Eduardo García is an Ann Arbor-based photographer and researcher focused on indigenous peoples in México, Mexican and Central American migration, disappearances, and social movements in Latin America.
Follow TomDispatch on Twitter and join us on Facebook. Check out the newest Dispatch Book, Nick Turse’s Tomorrow’s Battlefield: U.S. Proxy Wars and Secret Ops in Africa, and Tom Engelhardt’s latest book, Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.
Copyright 2015 Laura Gottesdiener
This Billionaire Governor Taxed the Rich and Raised the Minimum Wage. Now, His State’s Economy Is One of the Best in the Country
By Carl Gibson, Reader Supported News
The next time your right-wing family member or former high school classmate posts a status update or tweet about how taxing the rich or increasing workers’ wages kills jobs and makes businesses leave the state, I want you to send them this article.
When he took office in January of 2011, Minnesota governor Mark Dayton inherited a $6.2 billion budget deficit and a 7 percent unemployment rate from his predecessor, Tim Pawlenty, the soon-forgotten Republican candidate for the presidency who called himself Minnesota’s first true fiscally-conservative governor in modern history. Pawlenty prided himself on never raising state taxes – the most he ever did to generate new revenue was increase the tax on cigarettes by 75 cents a pack. Between 2003 and late 2010, when Pawlenty was at the head of Minnesota’s state government, he managed to add only 6,200 more jobs.
During his first four years in office, Gov. Dayton raised the state income tax from 7.85 to 9.85 percent on individuals earning over $150,000, and on couples earning over $250,000 when filing jointly – a tax increase of $2.1 billion. He’s also agreed to raise Minnesota’s minimum wage to $9.50 an hour by 2018, and passed a state law guaranteeing equal pay for women. Republicans like state representative Mark Uglem warned against Gov. Dayton’s tax increases, saying, “The job creators, the big corporations, the small corporations, they will leave. It’s all dollars and sense to them.” The conservative friend or family member you shared this article with would probably say the same if their governor tried something like this. But like Uglem, they would be proven wrong.
Between 2011 and 2015, Gov. Dayton added 172,000 new jobs to Minnesota’s economy – that’s 165,800 more jobs in Dayton’s first term than Pawlenty added in both of his terms combined. Even though Minnesota’s top income tax rate is the 4th-highest in the country, it has the 5th-lowest unemployment rate in the country at 3.6 percent. According to 2012-2013 U.S. census figures, Minnesotans had a median income that was $10,000 larger than the U.S. average, and their median income is still $8,000 more than the U.S. average today.
By late 2013, Minnesota’s private sector job growth exceeded pre-recession levels, and the state’s economy was the 5th fastest-growing in the United States. Forbes even ranked Minnesota the9th-best state for business (Scott Walker’s “Open For Business” Wisconsin came in at a distant #32 on the same list). Despite the fearmongering over businesses fleeing from Dayton’s tax cuts, 6,230 more Minnesotans filed in the top income tax bracket in 2013, just one year after Dayton’s tax increases went through. As of January 2015, Minnesota has a $1 billion budget surplus, and Gov. Dayton has pledged to reinvest more than one third of that money into public schools. And according to Gallup, Minnesota’s economic confidence is higher than any other state
Gov. Dayton didn’t accomplish all of these reforms by shrewdly manipulating people – this article describes Dayton’s astonishing lack of charisma and articulateness. He isn’t a class warrior driven by a desire to get back at the 1 percent – Dayton is a billionaire heir to the Target fortune. It wasn’t just a majority in the legislature that forced him to do it – Dayton had to work with a Republican-controlled legislature for his first two years in office. And unlike his Republican neighbor to the east, Gov. Dayton didn’t assert his will over an unwilling populace by creating obstacles between the people and the vote – Dayton actually created an online voter registration system, making it easier than ever for people to register to vote.
The reason Gov. Dayton was able to radically transform Minnesota’s economy into one of the best in the nation is simple arithmetic. Raising taxes on those who can afford to pay more will turn a deficit into a surplus. Raising the minimum wage will increase the median income. And in a state where education is a budget priority and economic growth is one of the highest in the nation, it only makes sense that more businesses would stay.
It’s official – trickle-down economics is bullshit. Minnesota has proven it once and for all. If you believe otherwise, you are wrong.
Carl Gibson, 27, is co-founder of US Uncut, a nonviolent grassroots movement that mobilized thousands to protest corporate tax dodging and budget cuts in the months leading up to Occupy Wall Street. Carl and other US Uncut activists are featured in the documentary We’re Not Broke, which premiered at the 2012 Sundance Film Festival. Carl is also the author of How to Oust a Congressman, an instructional manual on getting rid of corrupt members of Congress and state legislatures based on his experience in the 2012 elections in New Hampshire. He lives in Sacramento, California.
When we arranged with the local tree experts and altogether good people at Trees Unlimited to fell about a half dozen large ponderosas on our property and have them trucked to a mill, we scheduled the work to be done on Friday the 13th, disregarding all the silly supersitions about that date.
It turned out to be an unlucky date for us, though.
They had to cancel the job due to a work slowdown at the container ports on the West Coast. The mills can’t ship any more lumber to these ports (for the Chinese market, among others), because of a labor-management dispute between the International Longshoremen’s Association and the ports’ management (the Pacific Maritime Association).
And we can’t have the trees just felled and remain on the ground until the dispute is resolved. That could be weeks, or even months. By that time, the trees would no longer be marketable.
The work slowdown affects many more industries besides our local tree people.
It’d be interesting to know the full impact of the slowdown on Nevada County’s economy. We know that it’s affecting a lot of tree work here in addition to our own.
In the meantime, there’s no doubt that the slowdown is affecting businesses in neighboring California counties:
On Friday, the California Assembly Republican Caucus issued a press release begging the union and the port management to quickly resolve their dispute, calling attention to the harm already being done to California’s agricultural economy:
“The ongoing West Coast port labor dispute is having a devastating impact on our economy. Farmers and ranchers in particular are having a tough time shipping perishable food to customers worldwide. It is unacceptable that California’s economy is essentially being held hostage to a labor dispute,” said Assembly Republican Leader Kristin Olsen, of Modesto. “I am calling for action from President Obama and the federal government to intervene and secure a resolution so we can get our ports fully operating again.”
“Farmers, small business owners, retailers, truckers, consumers and nearly every Californian are being impacted by this ongoing dispute that has brought our ports to a virtual standstill,” said Assemblyman James Gallagher (R-Nicolaus). “I call upon both sides to come together to resolve this dispute without delay. President Obama and the federal government must also use every power at their discretion to bring the parties together to reach a settlement.”
“As we speak, precious fruits and vegetables are rotting in shipping containers that are bottlenecked at our West Coast ports,” said Assemblyman Devon Mathis (R-Porterville). “Our Central Valley has already been hit hard by the ongoing drought. The agricultural products our communities managed to produce despite the lack of water have been thrown to the wayside due to this disruptive labor dispute. We cannot allow these exports to sit for one day longer.”
The labor dispute at the West Coast ports has waged on for nine months. On Wednesday, it was announced that port operations will be suspended for four days as a result of the current labor dispute. According to one estimate, it could cost the country $2.1 billion per day if the ports shut down entirely for 10 days. Worse, congestion at West Coast ports could cost retailers as much as $7 billion this year alone.
According to the following business report, the President could force a cooling-off period under Taft-Hartley if the slowdown were to become a full-fledged strike or a complete lockout. In the meantime, the daily dollar cost of the slowdown is probably in the billions nationwide.
Economist Ross Ashcroft (in this 4-minute video) correctly points out that the most important warning sign of an impending crash is the level of private (household and business) debt as a percentage of GDP. In this view, he is in complete accord with Professor Steve Keen, one of the few economists to correctly predict the last big meltdown.
Playwright Alena Smith, describing the faded fortunes of American playwrights, notices that the impact of the Internet extends far beyond the print media:
This is what happens to “old media,” after all — new media rise up and displace them. We are clearly in the midst of such a conflict right now, as the internet has seized control of the global cultural economy, upending established industries and eroding formerly paramount institutions from book publishers to the music industry to print newspapers and magazines to now, finally, even the mighty television networks. Rough times lie ahead for the television industry, and these challenges will inevitably impact its writers.;
Side note: We’ve joined this revolution by dropping our cable service several years ago (saving ourselves over $100/mo). Now we do all of our “television” viewing online, Internet only.
As internet pioneer turned techo-skeptic Jaron Lanier starkly puts it in his 2010 screed You Are Not a Gadget, “Once file sharing shrinks Hollywood as it is now shrinking the music companies, the option of selling a script for enough money to make a living will be gone.” Lanier’s warning may seem hyperbolic, but unrestricted file sharing is surely what undermined the music industry, and it’s what’s hurting the world of journalism, too. In a sense, the internet caused the unbundling of both the music album and the print newspaper — and in doing so, severely damaged both industries. The trouble comes down to simple economics of supply and demand in the digital age. When infinite copies of a work of art can be made and distributed globally in an instant, supply is limitless, and the value of an individual copy gets pushed down to zero. But of course, the original cost of creating a work of art in the first place, for the creator, does not change a bit. Writers still need to eat, pay rent, and feed their families. They just can’t necessarily rely on profits from their actual work to compensate them for that endeavor. This is how a profession gets demonetized. This is how a job — a living — gets reduced to a hobby.
Notice too Smith’s perspective on net neutrality:
The platform where nearly all of culture now takes place is, in fact, owned and controlled by a handful of incredibly powerful, borderline-monopolistic corporations. And these are the companies, like Amazon, now getting into “the scripted game.” We’ve already seen the types of problems that can arise under this new arrangement — for example, in the recent conflict between Amazon and the publishing company Hachette. In an era where Amazon is responsible for 65 percent of all online book sales, and 41 percent of book sales, period, their thuggish negotiation tactics can be potentially calamitous for a publishing company, and devastating for individual writers. If this is how Amazon treats the writers of books, how well can we expect them, as producers or distributors, to treat the writers of TV shows? Similar questions can be asked about any of the powerful new platform owners — in particular, the telecom companies that actually control the physical cables and routers through which all our media now travels. The fight for net neutrality is the fight to stop the internet from becoming a place where giant telecom companies are able to dictate terms to every creator who wishes to distribute content through their pipes. And screenwriters’ livelihoods depend on it.
Read the full article here: “You Can’t Make a Living: Digital Media, the End of TV’s Golden Age, and the Death Scene of the American Playwright“
By Dean Baker
The big news item in Washington last week was Attorney General Eric Holder decision to resign. Undoubtedly there are positives to Holder’s tenure as attorney general, but one really big minus is his decision not to prosecute any of the Wall Street crew whose actions helped to prop up the housing bubble. As a result of this failure, the main culprits walked away incredibly wealthy even as most of the country has yet to recover from the damage they caused.
Just to be clear, it is not against the law to be foolish and undoubtedly many of the Wall Streeters were foolish. They likely believed that house prices would just keep rising forever. But the fact that they were foolish doesn’t mean that they didn’t also break the law. It’s likely that most of the Enron felons believed in Enron’s business model. After all, they held millions of dollars of Enron stock. But they still did break the law to make the company appear profitable when it wasn’t.
In the case of the banks, there are specific actions that were committed that violated the law. Mortgage issuers like Countrywide and Ameriquest knowingly issued mortgages based on false information. They then sold these mortgages to investment banks like Citigroup and Goldman Sachs who packaged them into mortgage backed securities. These banks knew that many of the mortgages being put into the pools for these securities did not meet their standards, but passed them along anyhow. And, the bond-rating agencies rated these securities as investment grade, giving many the highest possible ratings, even though they knew their quality did not warrant such ratings.
All three of these actions – knowingly issuing mortgages based on false information, deliberately packaging fraudulent mortgages into mortgage backed securities, and deliberately inflating the ratings for mortgage backed securities – are serious crimes that potentially involve lengthy prison sentences. Holder opted not to pursue criminal cases against the individuals involved.
In the last couple of years Holder did bring civil cases against these banks that led to multibillion settlements. These settlements won big headlines that gave the appearance of being tough on the banks.
If we look at the issue more closely the rationale for these settlements gets pretty shaky. When Bank of America or J.P. Morgan has to pay out several billion dollars in penalties in 2013 or 2014, the people being hit most immediately are current shareholders and to a lesser extent top management. Since stock turns over frequently, the overlap between the group of people who hold these banks’ stock today and the people who benefited from the profits racked up in the bubble years will be limited. This means for the most part the fines are hitting people who did not profit from the wrong doing.
The same story holds for the top executives. Insofar as these are different people from those in charge in the bubble years (this is mostly the case), they can rightly tell their boards that they should not be held responsible for the wrongdoing of their predecessors. As a result, boards are likely to compensate top management if they fail to hit bonus targets due to the fines. This just means more of a hit to current shareholders. So the people who profited from criminal acts get to keep their money, while Holder can boast about nailing people who had nothing to do with the crime.
Had Holder treated this as a normal criminal matter he would have looked to build cases from the bottom up. This means finding specific examples of mortgage agents issuing obviously fraudulent mortgages, cases where these mortgages got bundled into securities at investment banks, and then marked as investment grade by the rating agencies.
The people involved would then be pressed to say whether they are either buffoons or crooks. Most probably would not pass as the former. The next question is why they decided to break the law. When you get people to admit that they were acting on instructions from their bosses, you then ask the bosses whether they want to spend many years in jail or would prefer to explain why they thought it was a good idea to commit fraud. (This is the pattern the Justice Department is pursuing in going after illegal campaign contributions to Washington Mayor Vincent Gray.)
We can never know this pattern of prosecution would have nailed big fish like Goldman’s Lloyd Blankfein or Citigroup’s Robert Rubin. We do know that Holder never even tried. As a result the Wall Streeters who profited most from illegal acts in the bubble years got to keep their haul. This is the message that bankers will take away going forward. This virtually guarantees ongoing corruption in finance.
Dean Baker is the author of The End of Loser Liberalism: Making Markets Progressive, Taking Economics Seriously, False Profits: Recovering from the Bubble Economy, Plunder and Blunder: The Rise and Fall of the Bubble Economy, The United States Since 1980, The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer, Social Security: The Phony Crisis (with Mark Weisbrot), and The Benefits of Full Employment (with Jared Bernstein). He was the editor of Getting Prices Right: The Debate Over the Consumer Price Index, which was a winner of a Choice Book Award as one of the outstanding academic books of the year. He appears frequently on TV and radio programs, including CNN, CBS News, PBS NewsHour, and National Public Radio. His blog, Beat the Press, features commentary on economic reporting. He received his B.A. from Swarthmore College and his Ph.D. in economics from the University of Michigan.